Save for retirement

Pay off debt

Next, pay off any consumer debt you might have. This type of debt, like credit card balances or car loans, is usually short term and not tax-deductible. It typically carries a high interest rate as well.

Start an emergency fund

Once you're saving for retirement and you've paid off your high-interest debt, you should put aside money to build an emergency fund to cover at least 3 to 6 months' worth of living expenses. You don't want to be caught off guard when something unexpected happens.